SH. RAMNARAYAN MEENA,TONK vs. ITO, WARD-TONK, TONK

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ fu/kZkj.k o"kZ@Assessment Years : 2017-18 cuke Sh. Ramnarayan Meena ITO, Sendiyawas Delli, Vs. Ward, Tonk. Tonk. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: DCHPM0039P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri Arvind Kumar (CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 23/04/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 01/05/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the CIT(A), National Faceless Appeal Centre, Delhi dated 11.01.2024 [Here in after referred as “CIT(A)/NFAC”] for the assessment year 2017-18, which in turn arise from the order dated 21.03.2022 passed under section 147 r.w.s. 144 read with section 144B of the Income Tax Act, [Here in after referred as “Act” ] by the AO.

Sh. Ramnarayan Meena vs.ITO 2. The assessee has marched this appeal on the following grounds:- “

1. The Ld. CIT(A), NFAC has erred on facts and in law in dismissing the appeal filed by the assessee by holding that assessee is not interested in pursuing the appeal without providing adequate opportunity of hearing.

2. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs. 10,05,11,000/- u/s 69 of the IT Act, 1961 on account of unexplained investment in purchase of immovable properties whereas the source of investment is fully explained.

3. The appellant craves to alter, amend, and modify any ground of appeal.

4. Necessary cost be awarded to the assessee.”

3.1 Since, there was no reply or explanation from the assessee the ld. AO left with no option but to complete the assessment Sh. Ramnarayan Meena vs.ITO proceedings to the best of his judgment and in accordance with the provisions of section 144 of the Income tax Act, 1961 based on the information available on record. Hence a Show cause notice u/s 144 of the Income Tax Act. 1961 was issued to the assessee on 21.02.2022. The assessee was given an opportunity to file his explanation on or before 28.02.2022, but no reply has been received from the assessee. As per provisions of Section 144(1)(b) of Income Tax Act, 1961, if the assessee fails to comply with terms of a notice issued u/s 142(1), the Assessing Officer is empowered to gather relevant material and to make the assessment of the total income to the best of his judgment and determine the sum payable by the assessee based on such assessment.

3.2 The non-compliance by the assessee to statutory notices clearly show that reasonable speaking and fullest natural justice has been followed by the Assessing Officer, but it is the assessee who has not availed any chances for the reasons best known to him. Therefore, the bar of natural justice has been breached by the assessee for the reasons known to him. Accordingly. the assessment proceedings are completed, as per the information available in the case of the assessee. As it is seen from the ITBA/Insight Portal that the assessee has purchased two Sh. Ramnarayan Meena vs.ITO immovable properties for Rs. 5,85,06,000/- and Rs 4,40,05,000/- i.e. the total investment in the properties made during the AY 2017- 18 is of Rs. 10,05,11,000/-.

3.3 The assessee was given ample opportunities to furnish the explanation as regards to the sources of the investment of Rs. 10,15,11,000/- in the immovable property, however the assessee has not furnished any source of these investments. As such, the source for purchase of immovable property i.e. investment, remains unexplained and hence this unexplained investment needs to brought to tax under section 69 of the Income Tax Act 1961 as observed by the ld. AO. Hence, from the facts of the case, a legitimate inference can be drawn that the assessee had income of Rs. 10,05,11,000/-which he had invested in the purchase of immovable properties during the year under consideration and no explanation whatsoever is furnished by the assessee as regards to the source of this investment. Therefore, an amount of Rs. 10,05,11,000/- is treated as the income of the assessee and added to his total income for the A.Y 2017-18.

4. Being aggrieved by the order of the AO, the assessee filed an appeal before the ld. CIT(A). The Ld. CIT(A) observed that Sh. Ramnarayan Meena vs.ITO notices were issued on 28.12.2023 & 04.01.2024 and requiring the assessee to file the details in support of grounds taken by the assessee. Since the assessee has not complied with the notices issued the ld. CIT(A) dismissed the appeal of the assessee ex- parte order. The extract of the finding of the ld. CIT(A) is reproduced as under:-

“The conduct of the Appellant, as inferred from the last column of the aforesaid table/evidences that the Appellant is not interested in pursuing the Appeal: the law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known latin dictum, "VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT". The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant fails on this principle of equity. Even the Hon'ble Courts, in various pronouncements, have frowned upon the Appellants who file appeals but thereafter do not take any further interest in prosecuting those appeals.

1. The Hon'ble Income Tax Appellate Tribunal - Kolkata in the case of Pradeep Kumar Jhawar, Kolkata vs. D.C..T., C.C.-XX) (15 March. 2016) (ITA Nos. 450/Kol/2013 for Asst. Year: 2006- 07) dismissed the appeal of the Appellant for non-prosecution. 2 The Hon be Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 IIR 480) held as under: "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference,"

Sh. Ramnarayan Meena vs.ITO 2. Their Lordships of Hon'ble Supreme Court in the case of CIT vs. B.Bhattacharjee & Another (118 IT 461 at page 477-478) held that appeal does not mean, mere filing of the memo of appeal but effectively pursuing the same. In the judgment, their Lordships averred as follows: “……….This turns on the meaning of the words "preferred an appeal" "Preferred" is a word of dual import. Its semantics depend on the scheme and the context, its import must help, not hamper, the object of the enactment even if liberty with language may be necessary. There is good ground to think that an appeal means an effective appeal. An appeal withdrawn is an appeal non est as judicial thinking suggests. Black's Law Dictionary gives the following meaning: 'PREFER: To bring before; to prosecute; to try to proceed with. Thus, preferring an indictment signifies prosecuting or trying an indictment. It means to give advantage, priority, or privilege; to select for/first payment, as to prefer one creditor over others. Thus, it may mean prosecute or effectively pursue a proceeding or merely institute it. Purposefully interpreted, preferring an appeal means more than formally filing it but effectively pursuing it......” In view of the above, it is clear that the Appellant is not aggrieved with the reassessment order impugned herein and is not interested in pursuing the same. Accordingly, the additions/disallowance as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed The Last ground of appeal is always reserved for adding/altering/amending and/or substituting any or all grounds of appeal before the taking place of actual hearing or even in course of the hearing if the situation so warrants. Since the appellant has nothing to say on this. This ground of appeal is dismissed as "not pressed". In view of the appellant's total non-compliance during appeal proceedings, I find it extremely difficult to adjudicate on the appeal for want of adequate submission and clarification, counter-clarification. In the result, the appeal is dismissed.”

Sh. Ramnarayan Meena vs.ITO 5. As the assessee did not receive any favor from the appeal filed before ld. CIT(A). The present appeal filed against the said order of the ld. CIT(A) before this tribunal on the grounds as reiterated in para 2 above. To support the grounds so raised the ld. AR appearing on behalf of the assessee has placed their written submission which is extracted here in below:- “The assessee is an agriculturist. During the year under consideration he purchased two agriculture lands, one vide sale deed dt. 15.06.2016 (PB 3-13) for Rs.5,65,06,000/- and another vide sale deed dt. 20.06.2016 (PB 17-27) for Rs.4,40,05,000/- totaling to Rs.10,05,11,000/-, The consideration for purchase of these lands was provided by Patel Nagar Grah Nirman Sarkari Samiti Ltd (PB 42-44) from its bank account, details of which is as under:- Date Amount 16.06.2016 Rs. 3,87,60,000/- 16.06.2016 Rs. 2,35,50,000/- 20.06.2016 Rs. 4,33,00,000/- 20.06.2016 Rs. 19,50,000/- 06.07.2016 Rs. 14,00,000/- Total Rs. 10,89,60,000/- 2. The above amounts were credited in the Axis Bank account (PB 15) & Malviya Urban Co-Operative Bank Ltd. (PB 28-29) of the assessee from where the payment was made for purchase of agriculture land.

3. The said land was sold by the assessee to Patel Nagar Grah Nirman Sarkari Samiti Ltd vide sale agreement dt. 21.06.2016 for Rs. 10,77,21,000/- (PB 31-36). Accordingly assessee earned short term capital gain of Rs. 1,72,943/- (PB 40).

5. Against the assessment order assessee filed appeal before Ld. CIT(A) along with the copy of purchase deed, sale agreement & bank statement and explained the facts of the case in Form No.35. The Ld. CIT(A) however after reproducing the assessment order at Page 3-7 of Sh. Ramnarayan Meena vs.ITO its order observed that against hearing notice dt. 28.12.2023 adjournment was granted but against notice dt. 04.01.2024 neither any compliance was made nor adjournment was sought. He therefore dismissed the appeal by holding that in the absence of non-compliance it is extremely difficult to adjudicate the appeal for want of adequate submission, clarification and counter-clarification.

6. From the above it can be noted that assessee has explained before Ld. CIT(A) the facts relating to purchase/ sale of land and also filed all the relevant documentary evidences in support of the same which explains the source of the investment. However, the Ld. CIT(A) has not considered the same and dismissed the appeal In limine. It is submitted that L.d. CIT(A) has not provided adequate opportunity of hearing nor he has decided on the merit of the case even when the documents were filed before him. For this reliance is placed on the following cases:- CIT Vs. Premkumar Arjundas Luthra (HUF) (2016) 240 Taxman 133 (Bom.) (HC) The AO imposed penalty upon assessee u/s 271(1)(c). The assessee challenged the order before the CIT(A). However, as none appeared for hearing in support, the CIT(A) dismissed the appeal for non-prosecution. It was held that CIT(A) is required to apply his mind to all issues which arise from impugned order before him whether or not same had been raised by appellant before him. Law does not empower CIT(A) to dismiss appeal for non-prosecution. Kerala State Service Pensioners Co-operative Society Ltd. Vs. ITO & Ors. (2023) 230 DTR 209 (Kerala) (HC) Appellate authority cannot dismiss an appeal for non-prosecution, instead has to decide the matter on its merits.

6. The ld. AR of the assessee also filed an application for admission of additional evidence under Rule 29 of Appellate Tribunal Rules, 1963 which is extracted here in below:- “With reference to above, it is to submit that in the above appeal assessee has challenged the addition of Rs.10,05,11,000/- made u/s 69 of the Act on account of unexplained investment in purchase of immovable properties. The addition is made by the AO and confirmed by the Ld. CIT(A) since assessee did not file any reply/submission before them. It is submitted that the investment in purchase of land was made out of the funds provided by M/s Patel Nagar Grah Nirman Sahakari Samiti Ltd. on whose behalf the agriculture land was purchased and within few days of purchase it was sold to M/s Patel Nagar Grah Nirman Sahakari Samiti Ltd. However, the required documents could not be furnished to the AO and even before the Ld. CIT(A) as he did not provided sufficient opportunity to furnish the documents. Hence we are now enclosing Sh. Ramnarayan Meena vs.ITO herewith the documents at S. No.1 to 11 of Paper Book which goes to the root of the matter and therefore, it is requested to kindly admit theses evidences to impart substantial justice to the assessee.”

7. During the course of hearing, the ld. AR for the assessee prayed that the Id. CIT(A) and the AO both have passed the ex- parte order, and the assessee was not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO on merits as the orders of the both the authority are ex parte, and the assessee prayed to grant one chance provide the details in connection with the merits of his case and the additional evidence will reduce the liability of tax substantially and therefore, in the interest of equity and natural justice the assessee praying for the one chance before the ld. AO to advance the merits of the case.

8. Per contra, ld. DR objected to the prayer of the assessee for additional evidence and for remitting the back the case file to the ld. AO. He vehemently argued that in spite of various opportunities granted by both the lower authority the assessee remained noncompliance. Thus, now the assessee has no reason to seek equity and justice. The ld. DR also submitted the documents submitted by the assessee in his paper books are not having the Sh. Ramnarayan Meena vs.ITO certification that whether the assessee has presented the documents relied upon are not. Therefore, in that case if the Bench feels the matter may be restored to the file of the Assessing Officer then a fine be sent back. The ld. AR of the assessee also submitted that the assessee contended before the bench that the assessee has received the money from the Patel Nagar Grah Nirman Sarkari Samiti Ltd., after receipt of the money assessee has purchased the land. The assessee contended that the only capital gain is to be charged but the assessee even before the bench has not filed the copy of sale deed but has only filed the copy of the sale agreement. The ld. DR also submitted that these transaction undertaken by the assessee is also subjected to the other laws of holding the assets on behalf of the assessee and that money was not of the assessee. All these aspects need to be verified and even the source of the source in this case needs to be verified as the property is again falling back to the party from where the money is flowing.

11. As regards the non-compliance before the ld. AO the ld. AR of the assessee did not demonstrate before us any reason to justify the wastage of time of revenue officers. Thus, we deem it fit to impose the cost of Rs. 10,000 [ 5000 for each non making any effort to the notices issued by both the lower authority ] of non- compliance to be deposited into the “Prime Minister Relief Fund”. 12. So far as the merits of the case is concerned we note that the assessee while filling the appeal before the ld. CIT(A) has placed on all the records so as to determine the income chargeable to tax in the hands of the assessee, even though the Sh. Ramnarayan Meena vs.ITO ld. CIT(A) not called for the remand report and has also not discussed the matter of additional evidence whether the same is admitted or not. Before, us the assessee has filed the more details and also prayer for admitting the additional evidence which has not been discussed by the ld. CIT(A) in his order. Thus we admit the additional evidence brought on record by the assessee and vide his paper book the content of the index filed is reproduced here in below:- S.No. Particulars Pg. No.

Sh. Ramnarayan Meena vs.ITO 13. Admitting the above additional evidence the ld. AR of the assessee in support of the ground submitted that the it is apparent from the evidence placed on record that the income of the assessee from the all the sources is below the maximum amount not chargeable to tax and therefore, the addition made is required to be restricted to income of capital gain only in the case of the assessee. On the other hand, we find force in the arguments of the ld. DR that the assessee has submitted additional evidence which were not verified by the ld. AO. Not only that the huge fund is flowing to the assessee and the source is also needs to be examined since the assessee has received the fund from the third party and the same is again on that consideration sold to the Patel Nagar Grah Nirman Sarkari Samiti Limited. Therefore, the source of investment is received from the party in advance and against the money the property is transferred to the same party whose pays the money to buy property. This transaction needs to be examine even on the other applicable laws of holding the property under Benami Laws. In the light of these set of facts since the evidence placed on record are not tested with the proper verification the matter of capital gain cannot be decided as the revenue also needs to have the fair chance to tax the correct income of the Sh. Ramnarayan Meena vs.ITO assessee. Considering the overall set of facts as discussed herein above we admit the additional evidence with the cost as discussed above and set aside the issue of assessing the income of the assessee to the file of the assessing officer, who will decide the issue based on evidence and submission of the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO.

Order pronounced in the open Court on 01/05/2024.